The Portland daily press., 1887-06-21
THE COFFEE CRASH.
History Of Remarkable Movement
to Force Up Prices.
[Boston Commerclal Bnlletln !

l0~1e1H NoAhhtAtAdA Dulttlusl
The crash on Monday ended one OF the
most remarkable and successful bull move
ments In coffee ever undertaken. The adj
vances began in January, 1856. upon pur-
chases by the New York houses Of Joseph j.
O'Donohue & Son, w. II. Crossman & Co.,
Siegfried, Gruner & Co., and their immedi-
ate following They were followed by num-
erous heavy bankers and spectators Of
Havre. Coffee was ruling from 81 to cents
per pound In New York, the lowest price
ever known owing to the large crops Of pre-
vious years and the bad state of the Brazilian
finances which had demoralized exchange
and values generally. The syndicate bought
with the idea that the Generalization in val
ues and the low prices could not last and
also upon reports that the coming crop, that
is, the crop Of 1SS6-S7, which would begin to
come inJuly, 1886, would be a small one.
The coffee they bought averaged them
about71 cents per pound. The syndicate
was strong in capital and began to force up
the market and in spite Of strong resistance
were able to do 50. The floating of a Bra
lillian loan shortly caused exchange 70 rise
about cents and with IL went the price of
coffee. This syndicate kept control until
April when the price reached IA cents and
when 1t was apparent the 1SS6-S7 crop would
be equal II not greater than that of the pre-
vious year. Then they sold, clearing about
600.
BRAZIL BULLS.
Then the Brazilian syndicate, composed of
spectators and commission houses in Brazil,
and their representatives in New York, be-
gan buying, and shortly forced the prices up
to Is cents, and from that to 22A cents. This
they did in face Of the fact that the receipts
for eleven months of the crop year 1886 81,
or from July l, 1886, to June /, 1887, were
5,763,000 bags against total of 5,550OOO bags
crop year 1SS4-S5, and 5,075,000 for the crop
year 1883-S4.
They bought upon the statement of GO
per cent shortage in the crop Of 1SS7-SS. Up
to Is cents 1t is believed that they made mon
ey, but above that they have been obliged to
buy and hold coffee, and are now understood
to be carrying 100000 bags. If the next crop
does show shortage of 60 or so per cent,
the Brazilian syndicate can make money, but
II the crop is up to the average they will lose.
As about six-sevenths of all the coffee
used in this country Is Rio, the market for
mild coffee generally closely follows that of
the Rio. But the break in the Rio market
this week has not caused drop of any con-
sequence in mild. Some holders Of mild who
were caught in the Rio break, sold in order
to get money, but ninety per cent. Of the
holders have held firmly.
Though Maracaibos and Central American
cotfees generally are in rather light supply,
they would probably drop il Rio broke fur
ther as they owe their advances to the rise
in Rio, they being in good demand as mixers
and substitutes for Rio and consequently
rose with it.
Jayas, however, occupy a different posi-
tion. They are Independently strong. The
last crop Of Javas which Is fully harvested
shows loss Of 40 per cent. from the AVERAGE
OF previous crops and the new crop which Ia
Just beginning TO come into the markets AZ
Java, Will, 1t is claimed, only be about one
hall as large as the last, owing to wide
spread leaf disease and the deterioration Of
Moehas are also independently strong and
prices.